Native Individual Development Accounts funded

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WASHINGTON - The Community Development Financial Institutions (CDFI) Fund
has pledged $1.2 million to help develop American Indian Individual
Development Accounts (IDAs). The accounts are intended to stimulate Native
homeownership, secondary education or business creation by matching
individual dollars saved.

Separately, the CDFI Fund, a unit of the U.S. Treasury, has published
reassurances that its upcoming switch to the Commerce Department will not
affect its 2005 set of awards.

The CDFI Fund has three separate programs that benefit Native people. Many
American Indians fear that the CDFI Fund's move into Commerce, part of a
huge conglomeration of community development programs called for in the
2006 budget, will cut Native project funding.

The IDA initiative, which will include financial education, will be
implemented, by CFED, a Washington-based nonprofit. CFED is designing the
three-year program with First Nations Development Institute of Virginia and
its First Nations Oweesta Corp.

Other groups involved include Native Nations Institute and the Asset
Alliance.

The effort is an outgrowth of the CDFI Fund's influential 2001 report on
Native lending, which recommended expanding financial education and asset
building in Indian country to remove barriers to capital access.

"The partners will develop culturally-relevant training and resource
materials, offer a state of the art training institute and provide
customized technical assistance to Native CDFIs and other Native
organizations on how to implement and sustain IDA programs," the CDFI Fund
said.

One result will be a "train-the-trainers" session in August, followed by
training for Native CDFIs at eight regional trainings beginning this fall.

CDFI Fund, on its Web site, is reassuring CDFIs that the 2006 budget
proposals will have no effect on 2005 programs. But they can offer no
assurances for 2006.

The fund, through its NACA (Native American CDFI Assistance), NACD (Native
American CDFI Development) and NATA (Native American Technical Assistance)
programs, has been a substantial funder of American Indian, Native Hawaiian
and Alaska Native community development. It has also funded the Native
American National Bank through its mainstream Bank Enterprise Assistance
program.

A CDFI makes loans or invests in low-income areas. In recent years private
groups and the government have stumped for more of these institutions in
Indian country, since so few banks or other financial institutions are
located on reservations.

Prominent Native CDFIs include the Lakota Fund, Kyle, S.D.; and Hopi Credit
Association, Keems Canyon, Ariz.

In 2004, the CDFI Fund made 41 grants totaling $8.5 million through the
three Native initiatives. It received 76 applications requesting $23.5
million in assistance from Native groups.

In all, groups in 19 states were funded, including 19 groups that wanted to
develop Native CDFIs, five "emerging" Native CDFIs and 15 existing Native
CDFIs.

Fiscal year 2004 "represents the first time the fund has specifically
focused on providing financial assistance awards to Native CDFIs," the fund
reported.

The Native initiatives also offer technical assistance grants, which
awardees may use to acquire prescribed types of products or services
including technology (usually computer hardware and software), staff
training, consulting services to acquire needed skills or services (such as
a market analysis or lending policies and procedures) or staff time to
conduct discrete, capacity-building activities (such as Web site
development).

As an example of the kind of CDFI funding given last year to Indian
country, the Hoopa Development Fund in Hoopa, Calif. received $144,000,
split about 50-50 between loan capital and technical assistance. The fund
provides home loans, debt consolidation and educational loans to Hoopa
Valley Reservation residents.